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U.S. Spy Agency to Build Own Chip Factory

March 19, 1989

WASHINGTON (AP) _ The supersecret National Security Agency has ordered the construction of its own computer chip manufacturing plant, defense officials said.

Lt. Col. Keith Schneider, a Pentagon spokesman, said Saturday that ″in September 1988 National Semiconductor Corp. received an $85 million contract to construct and operate a microelectronics facility for the U.S. government over a period of 45 months.″

A Defense Department official, who spoke on condition that he not be identified, confirmed that the plant was to be built at the NSA’s headquarters at Fort Meade, Md., located about halfway between Washington and Baltimore.

The NSA is the nation’s biggest intelligence agency, with a work force topping 60,000 employees - more than all other U.S. spy agencies combined - and a budget said to be upwards of $10 billion a year.

Its main missions are eavesdropping on communications around the globe, encrypting U.S. communications and cracking foreign codes, as well as safeguarding the security of U.S. computers and communications systems.

James Bamford, an authority on the NSA, has reported that computers cover more than 5 1/2 acres at the agency’s headquarters complex.

The NSA’s basement, which stretches for city blocks, ″undoubtedly holds the largest and most advanced computer operation in the world,″ Bamford wrote in his 1982 book, ″The Puzzle Palace.″

The Baltimore Sun quoted Mary Coady, a spokeswoman for National Semiconductor, based in Santa Clara, Calif., as saying that in addition to building the computer chip plant ″we will also train government personnel in the operation of the facility.″

She declined to say when construction might start or how many people were expected to work at the plant.

The Sun also quoted George Heilmeier, senior vice president and chief technical officer of Dallas-based Texas Instruments Inc., as saying that the new plant would be ″a unique facility with a unique purpose.″

By making its own chips at Fort Meade, he said, the government gains more direct control, circumvents the bidding process on essential microchips and increases plant security.

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